Establishment of Sino-Foreign Strategic Alliance in the Chinese Construction Industry

摘要

The establishment of strategic alliances with Chinese manufacturing and constructioncompanies has become an important value creation strategy for western engineering andconstruction companies. Alliances of this nature are common for multinational companies. Suchrelationships in China, however, provide unique challenges for western companies and thereforethe following issues require evaluation: (1) The underlying motives of Chinese manufacturing andconstruction companies to enter into alliances with western partners; (2) Differences in nationaland corporate cultures and the effect on management of Sino-foreign strategic alliances. Withinthe Chinese construction industry when evaluating Sino-foreign strategic alliances, formal controlsand social controls are not mutually exclusive. Control mechanisms established by foreigncompanies including formal controls and social controls can be evaluated once motives and culturaldifferences are understood. The understanding of motivational and cultural differences and thesubsequent implementation of appropriate control mechanisms are critical to the ultimate successof Sino-foreign alliances. Therefore, information included in this article provides importantguidance for foreign companies in preparation for or already engaged in Sino-foreign alliances inthe Chinese construction industry.